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Seattle Times business reporter Elizabeth Rhodes posts the answers to your real estate questions as they pop up during the week. Join this ongoing discussion, which also features reader reaction to real-estate articles appearing throughout The Times.

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March 14, 2008 9:00 AM

Reader wonders about insurance coverage when home is vacant

Posted by Elizabeth Rhodes

Q: Is it true that homeowners insurance policies are only good if the home is occupied? Does this mean the home isn't covered if it's vacant because it's for sale? What if it's vacant because it's being remodeled? Or about to be rented?

A: Karl Newman, president of the nonprofit Washington Insurance Council, has answers to your questions, plus one more: Is a home covered when its owners temporarily are living elsewhere? Example: Snowbirds who reside here most of the time, but travel south for the winter months.

From the top, here are Newman's answers.

You've moved and your vacant house is for sale: After 30 consecutive vacant days, you lose the coverage for vandalism and malicious mischief, says Newman. All other coverage still applies, including arson. Owners can buy a special addendum to restore full coverage. Typically it's "much more expensive because the risk is higher," he says. The thinking there: Obviously unoccupied houses make inviting targets for vandals.

You've moved out while your home is being remodeled: The home is not considered vacant because people are there working on it. Therefore you still have full coverage, Newman explains. Insurance companies usually don't put a time limit on this, but Newman says it's good to ask your agent if a long remodel time could affect coverage.

You're a snowbird, or you get a temporary job assignment elsewhere: Newman says most companies don't treat this as a vacant situation because your furnishings remain there. So you still have coverage -- with one exclusion. Damage caused by freezing is only covered if the owner has taken "reasonable care" to prevent this by turning the water off and leaving the heat slightly on.

You've turned your home into a rental: Instead of a homeowners policy you now need what's called a dwelling fire policy. It covers the structure, its fixtures and also provides liability coverage in case someone is injured on your property. You have coverage between tenants.

While these are the general industry standards, some firms may have other rules. That's why Newman stresses that insurance policies are legal contracts. That means your precise coverage is governed not by industry standards but by your policy's language. So it pays to read it to make sure you have the protection you need. If not, talk to your agent.

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Posted by Clarence

10:53 AM, Mar 18, 2008

Seriously. It's really important to talk to your agent. It could save you from a world of hurt.

Posted by John

10:55 AM, Mar 18, 2008

Great story!

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